Score Winning Trades In Forex Market

With massive amounts of data flowing the forex all the time, what are our probabilities of us making winning trades in online forex market? Can our trading systems process the huge data and calculate the best entry and exit parameters to make winning forex trades? Read on to know the real truth.

An investor’s or a trader's current views of probability could be completely wrong, and could be the very reason why they are not making winning trades in forex and money in the markets. As we all know, anything can happen in the short term. With the probability of the forex prices moving up or down, your probability of making a profit, whether short or long on a position is 50%.

Let's suppose we have had five winning trades in forex market in a row. So we would think the odds of getting the sixth profitable trade would look extremely impossible. But actually, what we fail to realize is that our odds of success are still 50%! Investors and traders lose thousands of dollars in the forex markets by failing to realize this. Our every next trade has a new potential run. This means we start back at the top, every time. It is a mistake to assess our trading skills on the basis of a string of profits or losses on the forex market. Whether you are making multiple trades as a short-term trader or making only a few trades a year as long term investor, statistics apply on all time lines. There is a need to analyze the outcomes of the winning forex trades in a different way to understand if there is actual skill involved or they are simply "lucky".

Your trading skills will not be just reflected in the short term but will also be reflected in the long term. Enough trading data is required to accurately determine whether a strategy is strong enough to overcome random probabilities in scoring winning trades in online forex market. It might take several years or more to prove that a strategy is profitable over the longer time frame and in all market conditions.

So how do we get the odds in our favor and capture some winning trades in forex market? People do make money in the markets. And its not just because that they have been lucky or have had a good run. The winning forex trades and profitable results come from two concepts. The first concept is based on what has been discussed above, that is to be profitable in all time frames or win more in certain periods than is lost in others.

The second concept is based on the fact that trends do exist in the forex markets. If you understand statistics, you will know that the trends build a probability curve that is not normal but is skewed. Often referred to as a curve with a fat tail, it shows that traders can make profitable winning trades in forex market online by using trends on a consistent basis, even if it is on an extremely short time frame.

So, in a nutshell, a trader should not increase his position size by taking on more risk simply because of a string of wins, which should not be assumed to be as a result of skill. Similarly, a trader should also not decrease position size after having a long profitable run.

This information shared above on winning trades in online forex market should be good news, for all traders, especially the new ones. They can take solace in the fact that their researched trading system may not be faulty. Meanwhile the ones that have been having winning forex trades are advised to continually monitor their strategies so as to remain profitable.

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